Lithiums in Short Supply – Or Is It?
According to Eltipu Sayanna of Siddarth Grease and Lubes in Haryana, Indias grease manufacturers depend totally on lithium hydroxide imports, having no native sources to draw upon. [P]rices have skyrocketed over the past year, he told Aprils European Lubricating Grease Institute Annual Meeting in Venice, Italy. As a result, some grease manufacturers worry that LiOH has been priced beyond their grasp, as electric cars and consumer electronics devour every available kilogram.
Especially pinched are grease manufacturers with fixed-price supply contracts, who are forced to absorb the mounting cost and cannot pass it along to their customers, Sayanna indicated. China supplies most of Indias LiOH, which is also used to make batteries, dyes, pharmaceuticals and other products.
Another speaker at the ELGI meeting, Felipe Smith of minerals giant SQM, confirmed that LiOH supply fell short of demand in 2014 and 2015 due to booming demand from the battery industry. He said the tight market will continue throughout this year – and longer if new capacity is not built. SQM holds a 25 percent share of the worlds lithium chemicals market and aims to increase its output and sales by more than 20 percent this year, Smith said.
The grease industry consumes about 15 percent of the worlds lithium chemicals, but energy storage is taking an increasing bite. In 2010, batteries used 32 percent of the supply. They now consume 50 percent, and by 2020 theyll require 57 percent, SQM predicts. By then, the company expects global supply of lithium chemicals to top 200,000 t/y.
Also attending the meeting was Daisy Wang of Jiangxi Jiangli New Material Science and Technology Co., which has capacity to make 15,000 t/y of LiOH. Even though it is currently sold out of all material, the company exhibited at ELGI as evidence that it has not abandoned the grease market.
Wang said her company is adding capacity as fast as it can, but Chinas urgent need for electric vehicles to ease its air pollution has absorbed all of its current LiOH output. The company plans to produce 3,000 more tons next year, but she believes it may still be another 12 months before the market feels any relief.
Another ELGI exhibitor confided that the deeper problem for India, in particular, is whats called the price gap. Thats the gap between the actual cost of the material and the price that customers are willing to pay, he quipped.
One attendee suggested that India take a lesson from North American and European buyers, who assure reliable supplies by committing to long-term contracts with more than one seller. LiOH prices have gone up on those continents, too – but availability has not been an issue, he said.